Investor compensation

Protection for investors

Financial institutions that provide investment services are under a statutory obligation to segregate their own assets from the assets invested on behalf of their clients. This ensures that clients’ assets are kept safe if anything should go wrong, and protects investors against, among other things, the bankruptcy of the financial institution. The Dutch Authority for the Financial Markets (AFM) supervises financial institutions’ compliance with this statutory obligation.

If a financial institution does not comply with the rules governing the segregation of its own assets from those of its customers, or applies the rules incorrectly, for example due to fraud or mismanagement, the failing institution may drag the financial instruments and funds it manages for its clients into its bankruptcy and may not be able to return the funds and financial instruments to its clients.
The investor compensation scheme compensates investors for such losses.

Please note: the investor compensation scheme only applies to financial institutions that are licensed to provide investment services. Financial institutions that are only licensed to provide investment advice services are excluded from the investor compensation scheme.

Investor compensation does not protect all types of investments. Financial instruments and funds are protected, but crypto-assets, for example are not protected under the scheme.

Compensation of up to € 20,000

If you are eligible under the investor compensation scheme, you will receive compensation of up to €20,000 per investor.
If you hold a joint investment account with your partner, the maximum compensation for both of you together is €40,000.

Am I protected under the investor compensation scheme if my asset manager goes bankrupt?

The investor compensation scheme provides protection in the event that a financial institution providing investment services, such as an asset manager, goes bankrupt and is unable to return its customers’ financial instruments or funds.

This may occur, for example if, in the course of a bankruptcy of the financial institution it turns out that the financial instruments held on your behalf are missing. Or if something went wrong in the management of the assets, for example if the institution did not correctly segregate its own assets of yours, causing your financial instruments or funds to be drawn into the bankruptcy of the institution and making repayment of such assets to you impossible.

Who is eligible for investor compensation?

The investor compensation scheme is available to private investors. Small enterprises that are permitted to publish a summary balance sheet are also eligible. There are specific exceptions, however.

Who is not eligible for investor compensation?

Certain individuals and entities are not eligible for investor compensation. They are:

• Managing and supervisory directors, asset managers and personally liable partners of the investment firm in question.
• Individuals holding 5% or more of the capital of the investment firm in question.
• Professional market parties and investors such as banks, insurers, pension funds and government bodies.

Dutch investor compensation scheme

The Dutch investor compensation scheme is available to investors investing through a Dutch financial institution. Such as a bank, an investment firm or a manager of investment institutions licensed to manage individual portfolios. This can be a financial institution based in the Netherlands or a European branch of a Dutch financial institution.

Foreign investor compensation

Are your investments through an investment firm whose head office is in another country? Then they will usually be covered by that country's investor compensation scheme. In all countries of the European Economic Area (which include all EU Member States, Norway, Iceland and Liechtenstein) European legislation stipulates a minimum investor compensation of €20,000 per investor. Some countries offer higher compensation. Often, banks and investment firms headquartered outside the EEA are subject to different schemes, but they have the option of joining the Dutch investor compensation scheme. You can ask your financial institution which investor compensation applies.

Who funds the investor compensation scheme?

The Dutch investor compensation scheme is paid for by the financial institutions it covers. Together, they ensure that sufficient money is available to compensate all affected investors up to €20,000 per investor. De Nederlandsche Bank (DNB) determines the claims of the affected investors and ensures that the compensation is paid out. DNB works together with Stichting Beleggers Compensatiefonds, a foundation that administers the funds needed to make the payouts. 

Supervision of investment services

Financial institutions providing investment services must segregate their own assets from their customers’ invested assets. This protects investors against, among other things, the financial institution going bankrupt. The Dutch Authority for the Financial Markets (AFM) supervises compliance with this statutory obligation and will intervene if asset segregation does not function the way it should. Read more about the AFM’s supervision of asset segregation rules on the AFM website: Zijn je geld en beleggingen veilig?

Money in your bank account is also protected

Money in your bank account is protected under a different scheme: the Dutch Deposit Guarantee Scheme. If a bank should go bankrupt, you will get your money back, from 1 cent to €100,000 per person, per bank. Read more about the Dutch Deposit Guarantee Scheme.